EXHIBIT 99
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[LOGO] MRO SOFTWARE
FOR IMMEDIATE RELEASE
MEDIA CONTACT: INVESTOR CONTACT:
Vaughn Harring Peter Rice
(781) 280-6855 (781) 280-6550
vaughn.harring@mro.com peter.rice@mro.com
MRO SOFTWARE REPORTS THIRD QUARTER RESULTS
STRONG MAXIMO SALES, IMPROVED ITAM ACTIVITY DRIVES INCREASED REVENUE,
OPERATING MARGINS, EPS AND CASH
BEDFORD, MASS., July 17, 2003 - MRO Software, Inc. (Nasdaq: MROI), the leading
provider of strategic asset management solutions, today announced results for
the Company's third fiscal quarter ended June 30, 2003. Total revenues for the
third quarter were $47.6 million compared with $41.4 million for the third
quarter of the prior year, an increase of 15 percent. On a GAAP basis, the
Company reported net income for the quarter of $2.0 million or $0.08 per diluted
share, compared with a net loss of $1.8 million or $(0.08) per share for the
same quarter last year.
Pro forma net income (see Schedule A) for the third quarter was $2.8 million, or
$0.12 per diluted share compared with pro forma net income of $0.8 million or
$0.03 per diluted share for same quarter last year. Pro forma results are
adjusted for the amortization of acquired technology, goodwill and other
intangibles and their related tax effects. As a result of the Company's
implementation of FASB No.142 on October 1, 2002, the Company no longer
amortizes goodwill.
Revenue from software license sales was $15.3 million, compared with $12.4
million in the same quarter last year, an increase of 23 percent. Support and
services revenue was $32.3 million, compared with $29.0 million in the same
quarter last year, an increase of 11 percent.
As of June 30, 2003, the balance sheet contained $78.5 million in cash and
marketable securities, an increase of $4.2 million from the second quarter, and
no long-term debt. Deferred revenue increased to $32.0 million, and days sales
outstanding (DSO) dropped to 64 days.
There were a total of 234 software license sales for the quarter, including two
transactions in excess of $1 million. Customers for the quarter included: Archer
Daniels Midland, City of Atlanta, GE Power Systems Division, New England Medical
Center, Southwest Airlines, Safeway Inc., UNNICO, University of Chicago Hospital
and the U.S. Marine Corps.
"The strong third quarter results indicate that several of our major initiatives
are starting to contribute to the Company's success," said Chip Drapeau,
president and CEO, MRO Software. "We're seeing increased adoption rates for our
MAXIMO 5 solutions. Our focus on vertical solutions is paying off as well, with
several significant wins in the utilities sector during the quarter. The
alliance partner program is gaining momentum, as is our position within the IT
Asset Management market. Our improvement in revenue performance, operating
margins and earnings demonstrates our ability to execute against our plan."
"The Company's financial fundamentals showed improvements this quarter with
gains in each important category - software sales, operating margins, earnings,
cash, deferred revenue and DSOs," said Peter Rice, CFO, MRO Software. "As a
result of our third quarter performance, we've increased our expectations for
both revenue and earnings for fiscal 2003. We now expect total revenues to be
slightly above fiscal 2002 results of $171.9 million. On a GAAP basis, we expect
earnings per diluted share to be between $0.13 and $0.18 per share. On a pro
forma basis, we expect earnings per diluted share to be between $0.25 and $0.30
per share. Our pro forma earnings per share exclude the amortization of acquired
technology and other intangibles and their related tax effects. The difference
between GAAP earnings per share and pro forma earnings per share is estimated to
be approximately $0.12 for the fiscal year 2003."
The Company will hold a conference call to discuss these results on Thursday,
July 17, 2003 beginning at 4:30 p.m. EDT. To participate in this call, dial
(800) 932-9896, outside the U.S., call (706) 634-5804. A replay of the call will
be available for one week, beginning at approximately 7:00 p.m. EDT on July 17,
2003. To access the replay dial (800) 642-1687, or outside the U.S., dial (706)
645-9291 and use conference ID: 1510671. To view the full text of this press
release and related financial tables, or to hear a webcast of the conference
call, please visit the Investor Relations portion of the Company's Website at:
http://www.mro.com/investor.
FORWARD-LOOKING STATEMENTS.
This press release contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. The Company's actual results could differ materially from
those set forth in the forward-looking statements. Certain factors that might
cause such a difference include, among other things, continued sluggishness in
IT spending and stagnation in the market for our products, difficulties or
delays in the development or deployment of our industry solutions, delays in the
adoption and market penetration of our recently acquired MainControl products,
lower than expected benefits from our alliance partner program, and those
factors discussed in the Section entitled "Factors Affecting Future Performance"
in our Quarterly Report on Form 10-Q for the second quarter of fiscal 2003.
ABOUT MRO SOFTWARE, INC.
MRO Software is the leading provider of e-Business solutions for strategic asset
management. The Company's integrated suite of applications optimizes
performance, improves productivity and service levels and enables asset-related
sourcing and procurement across the entire spectrum of strategic assets.
The Company's asset management solutions allow customers to manage the complete
lifecycle of strategic assets including: planning, procurement, deployment,
tracking, maintenance and retirement. Using MRO Software's solutions customers
improve production reliability, labor efficiency, material optimization,
software license compliance, lease management, warranty and service management
and provisioning across the asset base.
MRO Software (Nasdaq: MROI) is a global company based in Bedford, Mass., with
approximately 900 employees, 10,000 customers and more than 260,000 end-users.
The Company markets its products through a direct sales organization in
combination with a network of international distributors. MRO Software has sales
offices throughout North America, Europe, Asia/Pacific and Latin America.
Additional information on MRO Software can be found at http://www.mro.com.
MAXIMO(R) is a registered trademark, and MRO SoftwareTM is a trademark, of MRO
Software, Inc.
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MRO SOFTWARE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
Three Months Ended Nine Months Ended
June 30, June 30,
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2003 2002 2003 2002
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(in thousands, except per share data)
Revenues:
Software $ 15,348 $ 12,398 $ 35,685 $ 34,000
Support and services 32,287 29,045 95,226 91,807
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Total revenues 47,635 41,443 130,911 125,807
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Cost of revenues:
Software 1,752 728 3,269 2,681
Support and services 14,662 15,032 44,103 47,663
Amortization of acquired technology 844 754 2,532 2,161
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Total cost of revenues 17,258 16,514 49,904 52,505
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Gross profit 30,377 24,929 81,007 73,302
Operating expenses:
Sales and marketing 16,074 14,032 45,765 43,743
Product development 6,512 6,514 19,656 19,675
General and administrative 4,764 4,429 13,118 13,776
Amortization of goodwill and other intangibles 226 3,064 704 9,169
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Total operating expenses 27,576 28,039 79,243 86,363
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Income/(loss) from operations 2,801 (3,110) 1,764 (13,061)
Interest income 205 217 596 750
Other income, net 169 519 1,150 445
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Income/(loss) before income taxes 3,175 (2,374) 3,510 (11,866)
Provision/(benefit) for income taxes 1,158 (540) 1,276 (3,277)
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Net income/(loss) $ 2,017 $ (1,834) $ 2,234 $ (8,589)
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Net income/(loss) per share, basic $ 0.08 $ (0.08) $ 0.09 $ (0.38)
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Net income/(loss) per share, diluted $ 0.08 $ (0.08) $ 0.09 $ (0.38)
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Shares used to calculate net income/(loss) per share
Basic 24,457 23,334 24,390 22,807
Diluted 24,489 23,334 24,542 22,807
MRO SOFTWARE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
PRO FORMA, AS ADJUSTED
Schedule A
(unaudited)
Three Months Ended Nine Months Ended
June 30, June 30,
----------------------- -----------------------
2003 2002 2003 2002
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(in thousands, except per share data)
GAAP net income/(loss) $ 2,017 $ (1,834) $ 2,234 $ (8,589)
Pro forma adjustments
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Amortization of goodwill and other intangibles 226 3,064 704 9,169
Amortization of acquired technology 844 754 2,532 2,161
Related tax effects (266) (1,161) (927) (3,336)
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Total pro forma adjustments 804 2,657 2,309 7,994
Pro forma net income, as adjusted $ 2,821 $ 823 $ 4,543 $ (595)
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Pro forma diluted net income/(loss) per share,
as adjusted $ 0.12 $ 0.03 $ 0.19 $ (0.03)
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Shares used to calculate pro forma net income/
(loss) per share, as adjusted 24,489 23,782 24,542 22,807
NOTE:
In this press release, the Company announced its earnings per share (EPS) on a
GAAP and pro forma basis. Pro forma net income for fiscal year 2003 is adjusted
to exclude the amortization of acquired technology and other intangibles and
their related tax effects. Pro forma net loss for fiscal year 2002 is adjusted
to exclude the amortization of acquired technology, goodwill and other
intangibles and their related tax effects. The Company adopted FAS No. 142 on
October 1, 2002. In accordance with FAS No. 142, the Company no longer amortizes
goodwill.
Management believes that such pro forma EPS is useful to investors, first
because it is important for investors to receive information in a form that is
consistent with the Company's past practice, and second because the Company's
amortization of acquired technology and other intangibles is substantially
fixed, and is relatively large in comparision with the absolute value of the
Company's operating income. The Company believes that by focusing on the impact
of expenses that are to a greater extent subject to control by the Company's
management, pro forma EPS provides investors with a more direct perspective on
the performance of the Company and its management.
MRO SOFTWARE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
June 30, September 30,
2003 2002
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(in thousands) ASSETS
Cash and cash equivalents $ 57,790 $ 67,315
Marketable securities 1,102 --
Accounts receivable, net 34,066 35,433
Other current assets 10,484 9,042
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TOTAL CURRENT ASSETS 103,442 111,790
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Marketable securities 19,568 500
Property and equipment, net 8,717 10,156
Intangible assets, net 54,958 58,366
Other assets 12,215 11,341
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TOTAL ASSETS $198,900 $192,153
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $ 23,661 $ 26,192
Deferred revenue 30,726 27,536
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TOTAL CURRENT LIABILITIES 54,387 53,728
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Other long term liabilities 1,340 405
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TOTAL LIABILITIES 55,727 54,133
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STOCKHOLDERS' EQUITY 143,173 138,020
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TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $198,900 $192,153
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